.comment: The Settlement Sucks

No Bright Aspect

November 7, 2001

By
Dennis E. Powell

There are no two ways about it: The settlement that the United States Department of
Justice reached last week with Microsoft Corporation is only barely better than the one
the parties reached in 1995. Microsoft, adjudged guilty of essentially hijacking the
software industry, has agreed not to do it anymore unless it wants to.

The
settlement's announcement lit a fire under the tinfoil hat crowd (details here), which was quick to come forward with
speculation as to the motives of secretive government officials, the exchange of money,
and other fanciful things that have no basis in evidence, let alone fact. The actual
explanation is a lot simpler: Microsoft has flummoxed the Justice Departments of two
consecutive administrations -- in both cases after the judiciary had decided that the
charges against the company were more than valid.

(I'll digress just a bit. Part of the job of prosecutors is to make cases go
away. That is why we have plea bargains and settlements. In the current case, the judge
strongly encouraged the parties to settle. Any settlement at all provided the government
lawyers a tick in the win column, which is paramount to them. Microsoft's lawyers had far
stronger motivation to be tough bargainers than did the government lawyers. And if you
think that all of this has nothing to do with justice, well, you're entirely right.)

Indeed, the settlement actually has the government agreeing with Microsoft that there
is only one operating system in the world today, and that operating system is Windows. It
deals with opening standards to the extent that non-Microsoft applications developers can
develop for Windows on an even field with Microsoft's own application writers (yeah,
right), but makes no provision for other operating systems. Especially unaddressed is the
matter of preloads, meaning that computer buyers will pay the Microsoft tax whether they
use Microsoft's execrable (and, arguably, excreted) software or not. In its purported
attempt to limit Microsoft's monopoly, the settlement in fact codifies it and if anything
extends it.

To put it another way, the settlement gives Microsoft everything it could have dreamt
of, and more. Justice couldn't have screwed up more, short of rolling up tanks and burning
down Redmond and perhaps sending in storm troopers to snatch Bill Gates so as to send him
to Cuba. Actually, that might have been a better outcome. Just kidding.

Alas, that's everything nice I have to say about the settlement. I'll stop now, lest
my language become intemperate.

No, there's one thing more: The settlement isn't the last word on the matter. There's
still time to raise hell about it, and the time is now to do so.

Not Unanimous

Nine of the 18 states that joined in the lawsuit have decided not to sign off on the
settlement, at least not yet. Iowa, Connecticut, California, Massachusetts, Florida,
Kansas, Utah, Minnesota and West Virginia are pushing for stronger sanctions. This throws
the entire case into a state of unprecedented confusion, as the apparently clueless
U.S. District Judge Colleen Kollar-Kotelly takes the whole mess down two separate roads --
one for those who settled and one for those who didn't. (Kotelly, whose name is
reminiscent of an unfortunate collision between the actor Savalas and the character he
played, got herself and the country into this by demanding a settlement. At the time, she
spouted a pseudo-patriotic nonsequitur to the effect that we can't possibly beat the
Taliban if Microsoft is in court. The least damning thing that can be said about her
actions thusfar in the case is that she has demonstrated that she is too fearful of being
overturned to be a judge, having taken the path least likely to expose her to
scrutiny. She has had little to do in U.S. v. Microsoft, but that didn't stop her from
falling short in even those limited tasks. The judge has virtually no experience in
business and antitrust litigation, and it shows; she has handled primarily criminal cases
since Bill Clinton appointed her to the Federal bench in 1997. Her most famous case before
now came when she ruled that the Department of Agriculture could not get rid of nuisance
geese without first getting a hunting license. I'm not making this up. In Microsoft, she
ordered a settlement, any settlement. And my God -- the government had already won the
frigging case!)

The states that wish to press the point must file their papers, which specify the
remedy they believe appropriate, by December 7. Microsoft has five days to respond.

Meanwhile, the settlement itself must be signed by all parties agreeing to it, after
which it will be published in the Federal Register.

Following Watergate, a law called the Tunney Act was passed, and U.S. v. Microsoft is
a Tunney Act case. The law was passed as a safeguard against undue political influence,
but its chief feature now is that publication of the settlement starts the clock on a
60-day period of public comment. The supposed goal of this is to let the court determine
whether the proposed settlement is or is not in the public interest.

While it is not likely to do any good -- the thinking in legal circles is that the
deal is done -- this period of public comment does open the door, just a little. We can be
sure that Microsoft will buy every legal scholar it can to provide commentary in praise of
the settlement; likewise, we can expect outfits like the one run by Edwin Black (in my
view, based on long observation, a first-rate nutcase), Larry Ellison, and the usual
suspects to speak out in opposition. The judge has already said that she has decided a
settlement is in the public interest, which is to say keeps her from having actually to
rule on a case that is demonstrably far beyond her degree of competence. For this reason,
it is unlikely that she will look upon the pleadings of the dissident states favorably --
she has already telegraphed that she doesn't want to hear from them.

Nevertheless, a substantial body of public comment in opposition to the settlement
might make the judge's shameful actions and Justice's giving away the store a little more
publicly embarrassing.